November 25, 2012
How The IRS will find you Abroad When you Have Not Been Filing US Tax Returns
We are often asked by expatriates living abroad who have not filed their US tax returns for many years (and have seemed to have dropped of any IRS list) how the IRS could ever find them or determine they are not filing their US tax return each year. Here are just some of the ways:
1. Applying for social security benefits or pension benefits
2. Opening US bank and financial accounts
3. Inheriting money from their parents or others and failing to report income generated by those funds.
4. A Whistle blower. The IRS pays finders fees for those who turn in tax evaders whether the snitch is a US person or a foreign person. The largest whistle blower fee paid to date is $104 million.
5. Renew a passport (you now must give the Government your social secuirty number) which is then sent to the IRS.
6. From a foreign countries tax agency exchanging information with the IRS under treaties or FATCA.
7. Form public domain information on the internet, websites, Linkedin, Facebook, Twitter, etc.
8. Registering the birth of a child born abroad with the US Embassy.
9. Marriages or divorces (that are public record) that reveal your existence.
10. By entering the US with a foreign passport that shows you were born in the USA
11. Stolen information from foreign banks and financial institutions given to the IRS
12. When your older children apply to US colleges or learning institutions and list information about their payments who long ago dropped out filing tax returns.
13. From other Americans in the US or abroad who do business with you
14. From suspicious activities forms filed with the IRS (yes this is an actual IRS form often filed by Banks or other financial institutions, car dealers, etc ).
15. As a result of information provided to it by the Serious Organised Crimes Office (SOCA) or the US Treasury's Financial Crimes Enforcement Network.
16. From data provided the IRS by other taxpayers entering the Offshore Disclosure Program.
17. Forming a corporation or LLC in a foreign country that requires you register yourself as the owner your US citizenship.
An ever increasing number of countries are agreeing with the IRS (over 50 currently) that the best way for each of them to collect more taxes is to share information about their residents with other countrys' tax agencies. Computers and the internet are making it easier to gather data and locate those who previously could successfully disappear into the world. It is difficult to guess exactly when in the near future, but for sure within the next 5 to 10 years there will be no where to run and no where to hide.